Relations between China and Japan have plunged to a new low, with Beijing accusing Tokyo of 'reckless militarism' and imposing new export controls on 40 Japanese companies over dual-use items. The move came after Japanese Prime Minister Sanae Takaichi suggested that an attack on Taiwan could trigger Japan's self-defence forces if it posed an existential threat to Japan. Tokyo has also protested joint Chinese-Russian bomber exercises near its airspace and alleged Chinese coast guard incursions into its Exclusive Economic Zone, while announcing missile launcher deployments on its easternmost island.
What sparked the latest tensions?
In November 2025, less than three weeks after taking office, Takaichi sparked controversy by stating that an attack on Taiwan could lead to Japan's military involvement if the conflict threatened Japan's existence. While this did not deviate from official policy, previous Japanese leaders had avoided such explicit comments. China responded swiftly: it accused Takaichi of interfering in domestic affairs, imposed economic sanctions, cancelled diplomatic meetings, discouraged Chinese citizens from visiting Japan, reduced flights, and continued a ban on Japanese seafood imports. Academic and cultural exchanges were also cancelled.
Historical hostility between Japan and China
China's grievances stem from Japan's brutal occupation during World War II, which Beijing believes Tokyo has never sufficiently apologised for. Although dozens of apologies have been made by Japanese prime ministers, cabinet members, and corporations, Japan's record falls short compared to Germany's extensive reckoning with its wartime history. Visits by Japanese politicians to Yasukuni Shrine, which honours Class A war criminals, further fuel claims that Japan is in denial about its past.
Is Japan pursuing 'neo-militarism'?
China's growing assertiveness and concerns about US reliability under Donald Trump are driving Japan's defence buildup. Japan has increased its defence budget by 9.4% to about $58 billion this year, moving towards a target of 2% of GDP. The ruling Liberal Democratic Party's right wing, including Takaichi, has long sought to revise the pacifist clause in Japan's constitution, arguing it is unrealistic against a more powerful China and nuclear-armed North Korea. China's defence spending is nearly five times larger at $275 billion, though its per capita spending is lower. Many observers believe China understates its defence budget by reclassifying military research and other spending.
Trade impacts and prospects for rapprochement
Frosty relations have hurt commerce. China has restricted rare earth exports and recently arrested two Japanese nationals accused of flouting those regulations. Chinese tourist visits to Japan dropped 45% in February, and lucrative Japanese film releases in China have been cancelled. Despite political tensions, bilateral trade topped $322 billion in 2025 and continued to grow in the first five months of 2026. This economic interdependence may prevent further escalation. Japanese diplomatic efforts are focused on a potential meeting between Takaichi and China's Xi Jinping at the APEC summit in Shenzhen this November. However, Chinese officials have repeatedly called for Takaichi to withdraw her Taiwan comments, which she is unlikely to do given their popularity with her supporters.
